CHN: The Affordable Care Act – Enrollment Begins

Enrollment in the Patient Protection and Affordable Care Act (ACA), also known as “Obamacare,” got off to a robust start on October 1 when 2.8 million people went to the website and millions more visited state-specific websites to explore their options.  The latest census data indicates that in 2012 nearly 48 million Americans, or 15.4 percent, were uninsured.   The ACA is heralded by the uninsured who often forego treatment for an illness and will no longer fear that unanticipated medical bills will deplete their savings or result in bankruptcy, and by advocates who believe health care is a right.
Uninsured individuals can use these websites to shop for and enroll in insurance plans that offer a basic package of benefits on health care exchanges, also known as marketplaces, where insurers compete for business.  Under the ACA all policies sold in the exchanges must cover what physicians and consumer advocates call “essential health benefits.”  They include hospitalization, ambulatory services, emergency services, maternity and newborn care, mental health and substance abuse services, prescription drugs, lab tests, wellness and preventive services, pediatric services including dental and vision care, and rehabilitative services.  (See more information on benefits.)

Sixteen states and the District of Columbia opted to set up their own exchanges; 7 states are doing a partnership with the federal government; and the other 34 states are relying on the federal government to set up their exchanges.  Lower and moderate income families and individuals with incomes between 100 and 400 percent of poverty will be able to apply for subsidies to offset the cost of premiums they cannot now afford.  Premiums and out-of-pocket costs will vary depending on the level of insurance coverage: bronze, silver, gold and platinum.

The ACA was signed into law by President Obama on March 23, 2010.  Since then, certain provisions of the ACA have already gone into effect.  Insurance companies are now required to provide their customers with free preventive care and screenings for illnesses, discounts for seniors for prescription drugs, wellness visits with no co-pays, the option for those up to 26 years of age to remain on their parents’ health care policy, an end to denying coverage to children with pre-existing conditions, and the requirement that they reimburse customers if they spend less than 80 percent of premiums on care.

On January 1, 2014, coverage purchased through the exchanges will take effect.  Insurance companies will then no longer be able to deny coverage to adults with pre-existing conditions or charge higher premiums based on sex or medical history.

The ACA includes an individual mandate that requires most individuals to have insurance so the system no longer bears as heavy a burden for providing coverage for the uninsured.  Annual penalties for failure to be insured are $95 per adult and $47.50 per child, or up to one percent of a family’s income.  Businesses of 50 or more employees will be required to provide health benefits for their employees.  Starting in 2015, if employers do not provide health coverage they will pay a tax penalty.  The 6-month open-enrollment period for the exchanges ends on March 31 for the 2014 calendar year.  Subsequent years will have a 3-month enrollment period from October through December.

Included in the ACA was the requirement that states expand their Medicaid program to cover non-elderly poor people who are 133 percent below the poverty line, or about $31,300 for a family of four.  The federal government is committed to covering 100 percent of the cost of the expansion through 2016, no less than 93 percent of the cost between 2017 and 2019, and 90 percent of the cost thereafter.  Both the individual mandate to buy health insurance and the Medicaid expansion were challenged in court.  On June 28, 2012, the U.S. Supreme Court upheld the individual mandate but said that states could not be required to expand their Medicaid programs, thus making it optional.  Twenty-four states and the District of Columbia have opted to expand Medicaid.  States can reconsider and opt for expansion at any time.  The states that have declined to expand their Medicaid programs have a disproportionate number of poor blacks, single mothers and low-wage workers who are too poor to qualify for insurance subsidies in the exchanges (their incomes must be at least 100 percent of the poverty line).  The New York Times recently estimated that two-thirds of the poor African Americans and single mothers who now lack health insurance will not get coverage because their states so far have failed to expand their Medicaid programs.  The Congressional Budget Office estimates that in 2014, about 14 million uninsured will be covered by the ACA through the exchanges and Medicaid expansion.  By 2019, that number will have risen to 25 million.  That still leaves millions uninsured.

Members of the Tea Party in Congress have refused to acknowledge that ACA is the law of the land.  Under pressure from them, the House of Representatives has voted over 40 times to repeal the ACA.  As Congress struggles to extend funding for appropriated programs in a Continuing Resolution (see article in this Human Needs Report) the House has attempted to add provisions to defund the entire ACA, to delay implementation of the exchanges for one year, and to repeal its medical device tax.  Democrats and the White House have remained united and strong in opposing these attempts to undermine the ACA.

Republicans argue that a one-year delay will provide more time to iron out the bill’s kinks.  Democrats know that delaying implementation of the exchanges would have devastating consequences, giving strength to attempts to kill the law.  For more information see the Center on Budget and Policy Priorities analysis of the impact of delaying the ACA.

The medical device industry and others that would benefit from a flood of new customers were asked to make a contribution to offset the cost of expanding coverage to millions of uninsured.  The 2.3 percent medical device industry tax was that sector’s contribution to help pay for the ACA.  This lucrative industry has total sales of over $100 billion a year, concentrated on a small number of large companies.  They have lobbied heavily against the tax and their presence in both Democratic and Republican dominated states has given bi-partisan support to the repeal of the tax.  However, Senate Democrats are united in opposing any changes to the ACA in the context of resolving the continuing resolution.

Like the Medicare and Medicaid adoption in 1965 and the Medicare Part D prescription drug benefit in 2003, implementation of the ACA will have bumps in the road.  ACA opponents, including some Republican governors and legislators, are attempting to sabotage the law.  In some cases, they have refused to provide accurate information about the law to their constituents and have discouraged their participation in the exchanges.  The drumbeat of misinformation has contributed to public opinion polls indicating both a lack of support for the ACA and inaccurate information about it.  These efforts have been countered by national, state, and local organizations who are working to provide education and encourage enrollment in the exchanges.  Proponents of the ACA believe that, just as most of Medicare’s initial detractors came to support the program, once people experience the benefits of the ACA, support will quickly grow.

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